How can I benefit from a team approach to investing?
February, 2016 | Holistic Wealth Management: Our Unique Approach
“ How can I benefit from a team approach to investing?”
By: Jeff Fuhrman and Jeff Kalapos
The Navy SEALs have a saying: “Individuals play the game, but teams beat the odds.” It is in this vein that Coastal Bridge Advisors’s own team approach combines with great discipline to help best serve client interests. One of the most pointed examples of this dynamic at work is through our investment committee. To wit, the critical investment decisions we make on behalf of clients are informed by the proven structure of a diverse yet united group of investment professionals whose focus is on helping families achieve their financial goals. Our investment philosophy is predicated on three overriding principles: diversification of asset classes, diversification of management styles and regular portfolio rebalancing. In other words, we are strong believersin the power of asset allocation. Having said that, every client we work with is dealing with unique circumstances, so we develop a customized portfolio to help each achieve his or her financial goals. After a suitable asset allocation is in place, we next assess the appropriateness of the ever-growing array of financial offerings available in today’s world. In addition to investment returns, fees and tax implications, there are certain relevant attributes we look for when evaluating alternatives. Careful monitoring of client portfolios allows us to rebalance and stay true to the confirmed strategy and risk level. As a planning- based firm, we take this responsibility seriously and believe that a structured process to determine and oversee this personalized portfolio is critical. While specific responsibilities vary by firm, the role of the investment committee is pivotal in the investment process. Ours is responsible for the evaluation, selection and, potentially, the termination of investment managers in client portfolios. The committee helps provide diversified funding options along the risk-return spectrum to assist in investment decision-making as well as determine criteria and procedures for evaluating and monitoring these alternatives. With open access to investment solutions, our committee has an extensive universe of products and managers to consider. Using a flat fee on all assets, we do not select managers on the basis of how much money we earn. Instead, we seek managers who we believe can best help clients realize their financial goals. In circumstances where we’re unable to identify either a particular manager or style which fulfills the appropriate risk/reward balance, we work with preeminent outside managers to develop customized investment solutions. Benefitting from the experience and talents of these external parties, we can devote great intellectual leverage to our clients’ advantage. To deliver on its mandate, our investment committee utilizes third-party independent research, direct manager diligence and its own internal analysis. Regular meetings are also convened. The makeup of the committee becomes critical, as does identifying a broad base of professionals with different investment backgrounds, experiences and training, to mitigate the risk of narrowminded decision-making. In fact, we see great value in leveraging multiple viewpoints, combining fresh perspectives with seasoned guidance. While these meetings are not argumentative, debate is not only welcome but encouraged to avoid any potential for “groupthink.” Rather, a collaborative, constructive process is engendered in the name of a common purpose: helping clients fulfill their financial objectives. Investing is not easy, and evaluating the dizzying array of alternative managers, styles and vehicles is not for the faint of heart. We believe that an active and formalized investment committee comprised of an open-minded, diverse group of professionals is an essential element for sustainable value for clients.
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